Applying for a Policy

20 Year Level Term Life Insurance

20 year level term life insurance is coverage provided for five, ten, twenty or thirty years. The difference between level term coverage and other term insurance is that the rate and coverage remain constant throughout the term of the coverage.

If a person is enrolled in a 20 year level term policy that has a value of $250,000, the premium will remain the same for the entire term of the policy. It is not affected by inflation or other market fluctuations. If the person dies during the term of the policy the beneficiary will receive $250,000 tax free.

The requirements for life coverage change as people reach their late middle age. The focus shifts from “Who will I take care of me and how can I pay for it?” to “How will the family survive without me?”

There is a 70% chance that you will require long term care as you reach the age of 65. There is no provision for long term care in Medicare. It only pays for carrying out the basics, such as getting in and out of bed, eating, and bathing.

The expenditure on care at home, an assisted living facility or at a nursing home can run into thousands of dollars every year. People who worry about their kids will have to worry about their diminishing savings.

Switching from 20 Year Level Term Life Insurance

So when should you stop investing in life coverage and start a long term care plan? The answer depends on your individual situation and cash flow. You might need both policies. In some cases just one may be sufficient. You may want to enroll in something that provides the best of both worlds.

20 year level life term insurance is largely for people in their 20s 30s and 40s. This is when you need life coverage if you have dependents who may suffer financially in the event of your death.

A middle aged couple has fewer financial obligations. The kids have left school and are working. The mortgage may be paid. Your priorities may shift from Life insurance to long term care. Any retirement fund that you may have accumulated is at risk id you get ill.

Anyone who does not have insurance for their long term care will have to pay for their own care until they have run out of money and qualify for Medicaid. This is the state and federal program designed for low income families or disabled adults. Medicaid reimburses you for long term care at nursing homes certified by Medicaid.

Having enough savings or sufficient insurance for your long term care will give you the freedom to pick the treatment and location of your choice. The wealthy may not feel the need to purchase long term care coverage as they can afford it.

People who do not have sufficient funds have to rely on their family or Medicaid. The Health Insurance Foundation states that it is nearly impossible to afford this on your own, as the expenditure can run into tens of thousands of dollars.

Overlapping Needs

You should start planning to purchase insurance for long term care when you are in your 50s. Buy it before you develop any health complications and before the term of your 20 year level term life insurance ends. After that it will be really difficult to find the best rates. If the mortgage is not paid off and there is someone who is still dependent on you, the need for long term care insurance and 20 year level term life insurance overlap.

Long term care coverage is becoming more expensive every day. The American Association for Insurance claims that the cost has increased by as much as seventeen percent in the last year. In cases, a person may drop life coverage or switch to a small plan to take care of the final expenses. For individuals with relatively modest means and no dependents it is more important to manage long term care.

Combining Long Term and Life Insurance

Some people want both long term care and 20 year level term life insurance. You can either purchase separate policies or invest in a single product that has the benefits of both. Life coverage with long term rider is a good option. It is gaining popularity as insurance providers increase premiums, reduce benefits and make the underwriting process stricter for traditional long term care policies.

Some companies are coming up with this rider on their whole life products. By taking this policy a person can access 90% of their death benefits to put towards long term care. The portion left unused is paid to the beneficiary upon the death of the insured person. If this rider is not used, the beneficiary receives the entire death benefit.

This rider is an attractive and popular product. It is not exactly a replacement for the traditional long term plan but it can serve as a good alternative. Some companies are selling both a stand alone and a combined product. Another option can be in the form of asset based life plans, also known as linked or combination policies.

This combines long term coverage and 20 year level term life insurance. In this policy, there is a one time lump sum premium of around $100,000. It provides death benefits to the beneficiary or long term care benefits if required. If you do not need the coverage you can get the money back paid as premiums.

These plans are designed for people who can cover themselves for long term care but would like to transfer some risk to the insurance provider. Talk to a financial planner and weigh the risks and benefits, it will help you develop a strategy and enable you to match the right insurance plan to your personal situation.